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Local broker Carolann Steinhoff faces allegations


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#1 Holden West

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Posted 31 July 2009 - 09:57 AM

She is the stockbroker to the elite of Victoria but for us poor people she is better known for the glamourous full-page ads selling her services that have appeared in Boulevard magazine for years.

City broker faces new allegations

Investment watchdog alleges her assistants doctored documents

By Barbara Shecter and Andrew A. Duffy, Times Colonist; Canwest News Service July 31, 2009

The Investment Industry Regulatory Organization of Canada yesterday alleged, among other things, that Carolann Steinhoff's assistants pasted old or photocopied signatures onto client documents, and used whiteout fluid to change instructions on documents while leaving the signatures intact.
Altered forms were alleged to have been sent by fax to Wellington's head office "as properly executed documents."
According to Wellington West, Steinhoff resigned from the firm at the end of June.

Yesterday, IIROC alleged that Steinhoff attempted to frustrate or obstruct the latest regulatory probe, as well as an internal investigation by Wellington West. She is accused of not responding truthfully or completely to questions about documents that were allegedly falsified in March of 2007, and also of altering a courier delivery receipt to corroborate her statements and counselling or encouraging one of her assistants "to make evasive or misleading statements" to investigators.

This fascinating in-depth 2005 article from Canadian Business outlines details of the previous allegations about this enigmatic character.

On Dec. 17, 1998, a dark cloud formed over Steinhoff. According to ScotiaMcLeod, she received a memo from her superiors alleging that she may have engaged in discretionary trading. It was a serious allegation. If a client wants his broker to trade on his behalf, he must apply in writing for what's known as a "discretionary" account. The application must be approved in writing by a senior brokerage official. Otherwise, before executing a transaction, brokers must obtain client instructions on the security to be traded, at what price, in what quantity, and the timing of the order. Failure to do so could be construed as discretionary trading, an offence most brokerages consider grounds for termination.

After she returned to work about a week later, she received a letter, dated April 30, from James Werry, a ScotiaMcLeod managing director and head of brokerage. It informed her she would be placed under "close supervision" for one month due to client complaints about discretionary trading. That meant her superiors would review and sign off on every trade she executed. The letter further warned that Steinhoff could be fired "for cause without further notice or warning" for future transgressions. "This is a serious matter and it must be dealt with by you in that fashion," Werry stated. (Ironically, nearly two weeks later, he sent a warm congratulatory letter to Steinhoff for winning the company's 1998-99 RRSP campaign and awarded her a $1,000 marketing allowance.)


"Beaver, ahoy!""The bridge is like a magnet, attracting both pedestrians and over 30,000 vehicles daily who enjoy the views of Victoria's harbour. The skyline may change, but "Big Blue" as some call it, will always be there."
-City of Victoria website, 2009

#2 spanky123

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Posted 31 July 2009 - 11:31 AM

I am certainly not talking Carolann's side in any of this but I can't help but notice that the allegations of misconduct seem to arrive each time the market takes a nosedive (early 2000 and now).

Seems to me that the elite don't seem to have a problem with Carolann doing whatever it is she is alleged to have done as long as it makes them money.

#3 VicHockeyFan

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Posted 31 July 2009 - 11:45 AM


Seems to me that the elite don't seem to have a problem with Carolann doing whatever it is she is alleged to have done as long as it makes them money.


Ain't that always the case.

#4 Phil McAvity

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Posted 31 July 2009 - 12:39 PM

Thank god for the "edit" button.
In chains by Keynes

#5 charlietuba

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Posted 06 August 2009 - 09:34 AM

She "quit" at ScotiaMcleod in 1999 and the market plunged in 2000. The Canadian Business article did not interview anyone from ScotiaMcleod or any of the witnesses.

#6 VicHockeyFan

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Posted 14 November 2009 - 09:14 AM

More today.

So I started reading that off the TC website, didn't notice the author, got half way through and thought, "Wow, I don't know this staff writer". So I went back to see it was done by a Vancouver reporter. Certainly a writing style that struck me as different, if not poor. There seems to be a lot of the writers opinion mixed into the article.

Also the first time I've seen them not delete a swear word, or at least the TC had never printed a curse, even when it is a direct quote.

#7 Holden West

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Posted 14 November 2009 - 09:30 AM

Steinhoff [...] sent an e-mail to another assistant, Tjerk De Gruijter, a University of Victoria business student who was working with Steinhoff as part of a co-op program.

"Just get a new form; cut out his signature from something we have already and paste it on form and fax," she instructed him in the e-mail. "Send him [the client] one in the mail to sign and when u get it back, send it to head office. Trish or Bonnie [one of Steinhoff's other assistants], please show Tjerk how to cut and past signatures. Thx :-)"

Ha! Welcome to the real world of business! What an evil thing to ask of a co-op student. How could he refuse to do such a blatantly unethical thing? Without a good reference from his supervisor, that co-op job and possibly his final academic standing is damaged.

In her formal response to IIROC's allegations, Steinhoff laid responsibility at her assistants' feet.
She said they arranged for client documents, not her. She said she never authorized or encouraged her assistants to alter documents.

Again, this is a whole new level of vile depravity in the local business community. I'm sure these assistants are paid relatively crap wages and simply couldn't afford to get on the bad side of a boss who at the time was one of the most well-known and respected business leaders in Victoria.

This is not a simple case of cutting corners in order to trim bureaucratic red tape. It's about abusing employees by essentially blackmailing them into unethical behaviour.

If proven true, Carolann Steinhoff deserves what's coming to her.

PS: How delightful it is that this thread is the number two Google result for "Carolann Steinhoff".
"Beaver, ahoy!""The bridge is like a magnet, attracting both pedestrians and over 30,000 vehicles daily who enjoy the views of Victoria's harbour. The skyline may change, but "Big Blue" as some call it, will always be there."
-City of Victoria website, 2009

#8 spanky123

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Posted 14 November 2009 - 11:27 AM

David Baines has been an investigative reporter for the Sun for many years. He focuses on exposing white collar crime. The TC has been running his articles for years as well.

Carolann has been back in business for months. Last time I checked she was with Queensbury and the IIROC reinstated her license in September along with instructions that Queensbury properly supervise her. She also filed a lawsuit against Wellington West alleging that they were trying to steal her clients.

I had thought that the IIROC investigation was over when they gave her her license back. I am suprised that they went forward with a hearing. In any event nothing will happen to Carolann. She makes her clients money and she has some very powerful people behind her. Nobody cares how she treats her staff (other than perhaps the staff) and from what I have been told, very few of her clients have left her despite years of allegations of misbehaviour.

#9 North Shore

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Posted 14 November 2009 - 11:35 AM

Nobody cares how she treats her staff (other than perhaps the staff) and from what I have been told, very few of her clients have left her despite years of allegations of misbehaviour.


Perhaps true, but based on this article, and others, if you were a new client, would you place your money with her - I don't think that I would...
Say, what's that mountain goat doing up here in the mist?

#10 Holden West

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Posted 14 November 2009 - 11:49 AM

Would that not set a precedent? If someone can get away with blatantly falsifying financial documents that opens up a world of potential abuse by others in the future.
"Beaver, ahoy!""The bridge is like a magnet, attracting both pedestrians and over 30,000 vehicles daily who enjoy the views of Victoria's harbour. The skyline may change, but "Big Blue" as some call it, will always be there."
-City of Victoria website, 2009

#11 AnonAnnie2

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Posted 14 November 2009 - 12:11 PM

David Baines has been an investigative reporter for the Sun for many years. He focuses on exposing white collar crime. The TC has been running his articles for years as well.

Carolann has been back in business for months. Last time I checked she was with Queensbury and the IIROC reinstated her license in September along with instructions that Queensbury properly supervise her. She also filed a lawsuit against Wellington West alleging that they were trying to steal her clients.

I had thought that the IIROC investigation was over when they gave her her license back. I am suprised that they went forward with a hearing. In any event nothing will happen to Carolann. She makes her clients money and she has some very powerful people behind her. Nobody cares how she treats her staff (other than perhaps the staff) and from what I have been told, very few of her clients have left her despite years of allegations of misbehaviour.


Spanky - you are spot-on.

#12 Bingo

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Posted 14 November 2009 - 12:19 PM

Would that not set a precedent? If someone can get away with blatantly falsifying financial documents that opens up a world of potential abuse by others in the future.

Exactly my sentiments.

An advisor could make document changes with honest intentions for awhile, and then one day they realise, hey, nobody noticed. The media have exposed some high profile names that people trusted with their money. Many of them are in jail, or in South America.

If your financial advisor had cut and pasted your signature into a document, would you still be a happy investor?

#13 spanky123

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Posted 14 November 2009 - 12:38 PM

Perhaps true, but based on this article, and others, if you were a new client, would you place your money with her - I don't think that I would...


I would bet that the article has zero impact on her and the IIROC action is of little concern. After all, she has continued to thrive and recruit new clients despite her problems with Scotia and those allegations were far more serious (unauthorized trading, churning, etc).

She makes lots of money for wealthy people. They don't ask questions. End of story.

#14 VicHockeyFan

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Posted 14 November 2009 - 12:48 PM

In this 2005 article, she says she eventually only regained 2/3 of her clients from Scotia, and ends like this:

Steinhoff, apparently, learned a thing or two from her years at ScotiaMcLeod. She estimates she has won back up to two-thirds of her clients, and has been able to continue building her book with new ones. In January 2004, she left UCS to join Wellington West, an independent investment services firm. "This time, nobody knew when I was leaving UCS to come here," she says, pointing out that the only people in the loop were two Wellington West executives and her husband. "We literally moved in the night."



#15 spanky123

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Posted 14 November 2009 - 12:58 PM

When you consider that Carolann would not have been able to directly solicit Scotia clients, that Scotia made a massive effort to retain the clients, and that Carolann was accused of unauthorized trading of her clients stock (amoungst other things), the fact that she was able to move 2/3rds of her book with her and then continue to build it proves my point!

#16 piltdownman

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Posted 14 November 2009 - 02:04 PM

If your financial advisor had cut and pasted your signature into a document, would you still be a happy investor?


I think it really depends. Do I know about it? There is a difference between it being done without my knowledge, and if I know and approve but simply cannot sign at that moment. I think we have all been in those situations where we have had someone fake our signature or faked a signature for convenience.

#17 Bingo

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Posted 14 November 2009 - 03:11 PM

I am certainly not talking Carolann's side in any of this but I can't help but notice that the allegations of misconduct seem to arrive each time the market takes a nosedive (early 2000 and now).

Seems to me that the elite don't seem to have a problem with Carolann doing whatever it is she is alleged to have done as long as it makes them money.

This is exactly the time that clients are more aware of their investments, and their financial advisors need to have their ducks in a row. When the market is up and the cheque arrives in the mail, everyone is happy.

It is human nature to be denial when things go south, as it is a reflection on how a person did their homework on choosing an advisor in the first place.

#18 victorian fan

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Posted 14 November 2009 - 03:16 PM

My financial advisor calls me for my approval every time. He's never done anything without it.

#19 Holden West

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Posted 18 November 2009 - 10:52 PM

More on the Steinhoff hearing.

You can't help but think if this were a criminal trial she'd be much better off simply telling the truth ("Hey, I cut some corners here and there. It was the only way to cut through the mindless bureaucracy without leaving millions of my clients' profits on the table"). Instead she continues to spew these crazy excuses.

In the second e-mail, she told another assistant, Tjerk De Gruijter: "Just get a new form; cut out his signature from something we have already and paste it on form and fax. Send [the client] one in the mail to sign and when u get it back, send it to head office. Trish or Bonnie [Steinhoff's other assistants], please show Tjerk how to cut and past signatures. Thx :-)"

During a videotaped interview, played this week at the hearing, Steinhoff told Zwarich she never meant the e-mails to be taken seriously, as evidenced by the "happy face" symbol at the end of the second e-mail.

She said that after she sent the second e-mail, she walked out of her office and told her assistants: "I hope you guys didn't take me seriously. I did not mean that. Do not do that. I will send a courier."


But Terrell, who testified at the hearing yesterday, said there was nothing ambiguous in her mind about Steinhoff's instructions: Steinhoff wanted her to dig out the original client guarantee, change the date, then fax the altered document to Wellington's head office in Winnipeg.

"That is a procedure that had been going on in our office for some time," she told the panel.

Questioned by lawyer Paul Smith, who is representing IIROC enforcement staff, Terrell said she never thought Steinhoff was joking.

"There was never really any joking going on in our office," she said.


I love that exchange. It's like a scene from TV's The Office.

He further noted that records show the courier did not pick up the document until March 15, and the client didn't sign and return it until the next day, and it wasn't sent to Wellington's head office until March 19.

When Smith asked her to explain this discrepancy, Steinhoff became snippy.

She said the timing had no relevance. She said she managed a $150-million book of business and was too busy to monitor administrative details.

[...]
Zwarich said he obtained the original courier slip and noticed the date had not been filled in.

It had been added later, by someone with different handwriting.

"I think it looks like your handwriting. Could it be?" Zwarich asked her.

"It could be," she replied.

Asked why she would put a date on the slip, she replied, "I have no idea."


There's something about her that reminds me of Ken Brotherston. A self-important person not used to being told off. an odious sense of entitlement.
"Beaver, ahoy!""The bridge is like a magnet, attracting both pedestrians and over 30,000 vehicles daily who enjoy the views of Victoria's harbour. The skyline may change, but "Big Blue" as some call it, will always be there."
-City of Victoria website, 2009

#20 piltdownman

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Posted 19 November 2009 - 08:44 AM

^I agree, sounds like they just cut some corners and now are now making some crazy excuses. Also I don't like the way the article is written to try to make it appear a long time passed between the events; "He further noted that records show the courier did not pick up the document until March 15, and the client didn't sign and return it until the next day, and it wasn't sent to Wellington's head office until March 19."

While if you open up a calender of the month it seems a very reasonable timeline.

Tuesday March 13th :: First Email is sent to Trish Terrell
Wednesday March 14th :: Second Email is sent to Tjerk De Gruijter
Thursday March 15th :: Courier takes document out
Friday March 16th :: Client returns document
Saturday March 17th :: Weekend
Sunday March 18th :: Weekend
Monday March 19th :: Sent to Wellington's head office

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